Will put a dent into teslas sales. You may be surprised on that one. Strong quarter for home depot, boosted by a resurgent home remolding sector. Is the stock, a buy, sell or a hold. Oldschool debate coming up. First lets check in with sue at the new york stock exchange. Hi, sue . Hi, ty. Good to see you and that big story is a developing one. Jpmorgan expected to sign today a 13 billion agreement with the government to settle claims that it overstate the quality of mortgages to investors during the housing boom. Lets take a look at where the stock has traded, up just over 1 . Kate kelly at jpmorgan headquarters in new york city. Kate, the street anyway, seems to be happy that at least this part of the whole saga may be behind jpmorgan . Yes, were getting close, sue and i think youre right. Investors are cheering the idea of a formal resolution to this although the 13 billion pack has been anticipated for a number of weeks now and, in fact, some portions of it have already been agreed to and announced. Lets give you the breakdown of that. Of the 13 billion, about 4 billion to the fhfa, already disclosed a couple weeks ago. Another 4 billion goes to consumer relief measures. About 2 billion financial penalties expected in connection with Mortgage Securities packaging before the financial crisis. And the balance to go to Credit Unions and various other government officials involved with the probe. Now in terms of consumer relief, this is an interesting piece of the puzzle. So jpmorgan has agreed to exit tend some things that its already doing and also agreed to some new things. Among them are of this 4 billion, theyre going to engage in some Interest Rate reductions, principle forgiveness and mortgage modifications and agree to try to embrace some antiblight steps in cities like detroit and an independent monitor established to see how things are going at the firm in this regard. This is something were seeing a little more of in terms of settlements. There was a similar piece to the sac settlement announced in terms of compliance over there. Finally the question that investors may have and well see this addressed hopefully in an investor call toward the end of the day or as soon as we get the announcement and theres time to digest it with jpmorgan cfo Mary Ann Lake and ceo jamie dimon. Are they adequate kuwaitly reserved and whats next. Jpmorgan added to them, to the tune of 9 billion during the last quarter. Right now, theyve disclosed they have 23 billion overall, sue and that means that they should have a healthy amount left over if and when the 13 billion deal is inked. Analysts on the outside say they could have 8 to 16 billion more even more in mortgage liabilities in the near future. Kate, thank you very much. It will be very interesting to see what those reserves are, indeed, and we await either a news release or as kate mentioned a call later this afternoon with jpmorgan. California has played an active role in that investigation since the beginning and it is out of sacramento where the official word will be anounsds later today where we find jane wells to explain why. Hi, jane . Hi, sue. Yeah, as soon as we get that official word later this morning, were expecting a press conference inside the Federal Building here. Why here . Two reasons. First, the u. S. Attorney for this area, ben wagner, has been at the epicenter of this investigation telling the Sacramento Bee he quote raised had his hand when the Justice Department was putting together a team to investigate jpmorgan. He and his deputies were on the cusp of announcing a case ceo when jamie dimon approached justice. Second geography. Wagners district covers the worst hit areas from the oregon border through the Central Valley down to l. A. County. Wagner says he has made mortgage fraud his offices top white collar priority indicting more than 350 people since 2008. He likens the mortgage fraud in this area to a, quote, tsunami and meantime, of course, jpmorgan took over Washington Mutual in 2008 and many california mortgages that went south came from wamu. According to the state senate here from 08 to 11 more than a million california homes were foreclosed on, one out of every 13 houses and six of the nations hardest hit zip codes are in wagners district, stockton, vallejo and where i am right now in sacramento. So this is a case that hits very much close to home, literally and tyler, when this News Conference happens we will get you the latest. Back to you. Jane, thank you very much. Jane reporting from sacramento for us. With the settlement presumably soon to be behind them, is the worst over for jpmorgan or not . It still faces at least nine other government investigateions so is it worth investigating in . If not which of the financials are. Joining us is Michael Scanlon with management asset management. He runs a 3 billion fund for john hancock which holds over a mill be shares of jpmorgan and also with us on the phone is bank analyst Gerard Cassidy who has an outperform rating on the stock. Michael, let me begin with you. If youre holding a million shares of the stock i assume you are very comfortable in saying this is one step to put these legal troubles behind it and that maybe jpmorgans better days stock wise are ahead . Yeah. Its very true. You know, if you look at the stock year to date its up 28 which is a pretty good year. I think the precedent and track record for the Financial Group is reserve, settle and move forward. Buy the stocks where theyre going, not where theyve been. This puts some of the environmental costs behind them but does not put all of them. How do you justify on behalf of your shareholders opening a stock that presumably is going to admit to some sort of misbehavior maybe even criminality, fraud . Well, theyre settlining it with a financial settlement. Sw jamie dimon has been transparent there are errors along the way, you know. He obviously aggressively is settling this and writing the check and making the concessions to other borrowers in order to put this behind them. It is a kidnapper, concern, reputational hit, where it was trading at a premium, so the stock has suffered the consequences but we like it a lot Going Forward. Gerard, how about you. You have an out perform on this stock. I assume that means from this day forward and maybe from the days behind, youre comfortable buying this stock . Right . Yes, we are. In fact, when you take a look at the core earnings power of Jpmorgan Chase, its about 20 to 25 billion per year. Once they put all of the litigation issues behind them, this company, like our other too big to fail pankss, are probably not going to be permitted to buy other depositor tos or other institutions meaning they will return that capital to shareholders in the future. What about the other investigations that jpmorgan presumably still faces not going to be settled as part of this 13 billion presumed settlement, what about them and could those be tripping points Going Forward . Certainly there are other investigations of Jpmorgan Chase and other Capital Market players, particularly the Foreign Exchange investigation thats under way. And they could trip up the company over the near term. I think thats why when you look at the 23 billion that theyve set aside, theres anticipation that there will be more settlements to come. Let me ask you quickly, gerard, are there any other financials you like better than jpmorgan right now . I would say bank of america for folks looking for pure play on the recovery of the u. S. Bank of america is the way to play them. How about you, michael, do you have a financial you like as much or better than jpmorgan . Our top two financial positions jpmorgan and metlife has been another big winner year to date. We think that story has a long way to go. We appreciate it. We appreciate that very much. Sue, down to you. Ty, to the overall market, were up a little bit or we were a second ago on the Dow Jones Industrial average but some of the stocks that have pushed the dow and the s p 500 to record highs, have been take something hits recently and that brought us to the question of whether this is an oman to an overall market pullback. Dominic chu is taking a look at that part of the story. Hi, dom. Hey sue. There is no crystal ball. If i knew where stocks were going i probably wouldnt be here withes you guys right now, but we did want to show some of the stocks traders have been saying show signs perhaps of weakness ahead and three stocks in particular we wanted to key in on this time around were three pretty well known names. Regeneron the Biotech Pharmaceutical Company and cree, the maker of led lights. It if you take a look at the last 12 months, last year, these have shown healthy gains. You see freescale up about 32 . Regeneron up 60 and cree 63 . Healthy gains for a year. Now over the course of the past quarter to date, thats just the last six weeks or so, weve seen weakness come into these stocks. Theyre starting to roll over a little bit and that may be a sign, say some traders, for a pullback. Take a look at freescale, up 32 year to date but in the last quarter its down about 13 . Again, rolling over a little bit. Regener regeneron, the same thing, down 12. 5 . With cree its down about 8 . So as we take a look at some of these names, traders are always looking for signs of a turning point in the market. One of the signs is whether these types of stocks that have had very healthy gains, start to show some signs of reversal and thats the reason why some traders, at least are a bit concerned. Back over to you. All right. Dom, thank you very much. Lets talk about this with kenny polcari, director of floor operations with oneill securities. And to doms point, they have had a pullback, but to your point, theyre still up 30 or 50 . 60 or 63 . It makes perfect sense if Asset Managers are looking to raise some cash as the market is up 26 or 27 year to date and looking to raise cash and take the cash and funnel it into other things, the underperformers, it makes perfect sense youll take money out of the names that have been the best performers. Youre not going to take money out of the names underperforming if you still believe in that story. Youre taking money off the table and redeploying it. How does the market feel to you overall . We bumped our head against the psychologically important levels and then backed off a little bit. Its holding up nicely today. Why not see a continuation of the selloff . 1800, 16,000, theyre just round numbers. Theyre much more psychological. Yesterday what you saw there wasnt an explosion in volume to the upside so it traded there, it hit there, felt like it had some resistance and then you had the commentary from carl icahn yesterday which caused them to go crazy. The Asset Managers arent reacting to carl icahn. What about the margin debt . Thats one thing that does worry me as the video investor starts to get into this market, one of the things you watch for is how much people are borrowing to buy stock . Weve talked about that. Its almost near record highs if not at record highs. That is concerning because what all that says is people are having us feeling once again stocks can never go down so bore roy everything and bet the house. Probably not the smartest thing to do. It would tend to bring some caution, but yet overall, i think the market still feels healthy. Next year is going to be a good year. Talking about the global recovery, feels like it. On that note were going to leave it on an up note. Were leaving it there. Up to you. Thanks, guys. Tesla under fire literally and figuratively. The national Highway Traffic Administration has launched an investigation into the luxury electric sports car maker after it reported three car fires over the past six weeks. The stock down about 33 since it hit its highs of 194 a share on september 30th. Right now as you see, at 125. 12 its up strongly today. Will the investigation put a dent into future sales . Phil lebeau to answer that question for us at the auto show in los angeles. Phil . Hi, tyler. Whats interesting is were hearing a lot from elon musk on twitter today. Well give you a taste of that in a little bit. Lets focus on what this investigation regarding the model s is about. Its focusing on two battery fires here in the u. S. One last month just outside of seattle, washington, thats where this video is from, and another one earlier this month in tennessee. Both of those fires are the focus of the investigation. By the way, nobody was hurt or killed in either of those fires, of which elon musk referenced on twitter today, hes been tweeting out about the fact that they are now the focus of an investigati investigation. He writes what makes this incredibly unjust is that the model s to date has the best Safety Record of any car on the road an then puts in parentheses, no injuries or deaths ever. It is still unclear whether this investigation will actually lead to a recall. Its not uncommon that they will do an investigation and then at the end determine you know what, no need for a recall here. On the other hand, at lot of these dayss cases end up with a recall. Any fixes required to the model s will be done free of charge. This is one of those stories, tyler, hearing a lot from elon musk on social media about the model s and his belief that it is a safe vehicle. Very interesting. Ironically you are at that l. A. Auto show where audi is set to unveil its First Venture into electric cars and a 3 sport pack. The marks for the electric vehicles has not been particularly sprightly. Why does audi get in now . Why do they think their model might win where others have barely scratched the surface . Couple things to keep in mind. Theyve been working on this a number of years. You just cant hit the brakes right now. Second of all audi believes that when the a 3e goes on sale in 2015 it will be well received. Heres the president of america for audi talking about the belief that the demand for electric vehicles will still be there. I think its a big tempest in a tea pot. I think its going to be a lot of noise but the consumers are buying hybrids, they are buying plugin hybrids and believe in this technology. Whether or not theres a short blip you can debate it. Longterm sustainable its going to be there. And hes talking about whether or not people will be concerned following the investigation of the model s. By the way, the a 3e tron audis first plugin hybrid goes on sale in 2015. First 20 miles all electric. Look at shares of volkswagen. Keep in mind all of the automakers if they arent already develop something type of an electric vehicle, whether a hybrid or pure electric, they are all working on it and those models are coming. Audis in 015. Thank you very much. Phil lebeau reporting from l. A. Now to dominic chu for a market flash. Hi. Hey tyler. Shares of Jacobs Engineering taking a hit near session lows after the technical professional construction and Mining ServicesCompany Reported earnings that fell short of analyst estimates, but jacobs order backlog did grow by over 8 to 17 be there. The company also said it sees full year fiscal year earnings in 2014 between 3. 35 and 3. 90 in line with expectations. It does see weakness, sue, in the current quarter. Back to you. Thank you very much. So, we focus on microsoft. Who will replace Steve Ballmer at the company . Word has it the decision would come within days. Were live at the companys annual Shareholders Meeting where theyre down to a short list of candidates including one that has leapfrogged to the top of the least. We name names right after a quick break. Tdd 18003452550 searching for trade ideas that spark your curiosity tdd 18003452550 can take you in many directions. Tdd 18003452550 you read this. Watch that. Tdd 18003452550 you look for whats next. Tdd 18003452550 at schwab, we can help turn inspiration into action tdd 18003452550 boost your trading iq with the help of tdd 18003452550 our live online workshops tdd 18003452550 like identifying market trends. Tdd 18003452550 now, earn 300 commissionfree online trades. Call 18886282419 or go to schwab. Com trading to learn how. 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Within a year the stock is up about 15 since the announcement. Josh lipton is at the Shareholders Meeting in bellview, washington. How close is the board now to naming ballmers successor . Yeah, tyler, bill gates at the Shareholder Meeting. He gave us no guidance as it to when exactly they would select that new ceo. He simply said the process was going smoothly. He did, though, s